Canadians keep pivoting to private-label brands (Survey)

Private-label brands are having a big moment, a new global study shows.

The “EY Future Consumer Index” survey found that after “discovering” private-label products because of pandemic-related shortages, 90% of Canadian consumers will switch from name brands to private labels in at least some categories as the holiday season approaches.

“Consumers in Canada have been switching to private label for some time, however, what’s happened is more consumers are now more influenced by their wallet,” says Joel Alden, central Canada consumer leader at EY Canada. “A significant number of Canadians are in that cutting back or savings mode, and private label offers an attractive alternative to branded products in terms of being affordable and still good quality.”

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While consumers across all age groups have increased their purchases of private-label products, the shift is most noticeable among younger consumers 18-29. “They haven’t grown up with the strong brand affinity that some older generations have, so they’ve been more interested in trialling new products they see in the grocery store,” says Alden.

The study notes that because this group is at the start of their purchasing life, this could result in a systemic change over the long term.

Alden notes that as the quality and innovation of private-label products have improved in recent years, they can become a revenue generator and loyalty generator for grocery retailers. “As new customer segments get to trial some of these great products, they start to build loyalty with that grocery brand, and that obviously has long-term positive benefits for the grocer,” he says.

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When it comes to purchase criteria, the survey found that price (60%), health (55%) and availability (40%) are top considerations when choosing products or services. In addition, 62% of consumers say they’re more likely to buy products from companies they feel are doing good for society and 29% say they are prepared to pay a premium for brands that contribute to the community.

The shift towards stocking up on food and household goods is expected to continue as well. Nearly half (45%) of Canadians still feel uncomfortable about going out to eat and 51% plan to keep their cupboards stocked with excess supplies.

The global survey of more than 13,500 consumers, including 500 Canadians, was conducted in October. The full report can be found here.